AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 Fact Sheet Enrollment and Coverage Trends for Americans Ages 50 to 64 in the Nongroup Health Insurance Market Jane Sung and Olivia Dean AARP Public Policy Institute Robert C. Saunders, Julia Sheriff, and Aig Unuigbe KNG Health Consulting This fact sheet analyzes enrollment and coverage trends of American adults ages 50 to 64 in the nongroup (or individual) health insurance market as of 2019, prior to enactment of the American Rescue Plan Act of 2021. Background Although the majority of Americans ages 50 to 64 have health insurance coverage through an employer (group coverage) or a public program (such as Medicaid), 5.4 million (or 9 percent) purchase health insurance coverage on their own in the nongroup (or individual) health insurance market.’ The Affordable Care Act (ACA) of 2010 enacted significant improvements to health insurance offered in the nongroup market, including the establishment of health insurance marketplaces, financial assistance to help people afford premiums and cost sharing (e.g., deductibles, coinsurance, and copayments), and consumer protections to improve access to comprehensive coverage.” Consumers can purchase nongroup coverage either on the health insurance marketplaces or outside of such marketplaces (often referred to as “off-Marketplace”). This fact sheet reports enrollment and coverage trends of adults ages 50 to 64 in the nongroup market, as of 2019, prior to expansion of premium tax credits enacted in the American Rescue Plan Act of 2021. Trends reported here will likely change starting in 2021 as a result of that legislation. A companion fact sheet Key Take-aways: Older Adults in the Non- group Health Insurance Market Older adults rely heavily on the nongroup health insurance market. In 2019, nine percent of Americans ages 50 to 64 (5.4 million) were enrolled in the nongroup market. Older adults make up a disproportionately high and growing share of this market. The nongroup market has been getting older over time, as the proportion of adults ages 50 and older has increased. Because of the ACA, the uninsured rate among older adults has fallen 34 percent since 2013 as coverage increased in the nongroup market. Trends shifted starting in 2017, reflecting market uncertainty, reduced outreach, and federal policy changes. After 2016, the uninsured rate among older adults ages 50 to 64 increased slightly and nongroup enrollment decreased. ~AARP AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 1 Enrollment of Adults Ages 50 to 64 in the Nongroup Market, 2013-2019 7.0M 6.2M 6.3M ——— Ee —.. 6.0M a 5.6M 5.4M ——# ee 5.0M 4.0M 3.0M 2.0M 1.0M 2013 2014 2015 Source: KNG Health Reform Model. reports on characteristics of older adults in the nongroup market. Nongroup Enrollment The ACA led to a significant increase in enrollment of older adults in the nongroup market. Although only 3.8 million older adults ages 50 to 64 were enrolled in the nongroup market in 2013, that figure rose to a high of 6.3 million older adults by 2016. Over the following three years, however, enrollment among older adults fell nearly 15 percent. As of 2019, 5.4 million older adults are enrolled in the nongroup market (figure 1). The number of total adults ages 18 to 64 enrolled in the nongroup market follows a similar trend. While adults ages 50 to 64 make up 32 percent of all adults ages 18 to 64, they are a disproportionate share of the nongroup market, accounting for 42 percent of all adults ages 18 to 64 enrolled in the nongroup market in 2019. This share has grown over time. The percentage 2016 2017 2018 2019 of older adults ages 50 to 64 enrolled in the nongroup market increased from 6.2 percent (3.8 million) to 8.8 percent (5.4 million) between 2013 and 2019, compared to a 4.2 percent (5.6 million) to 5.2 percent (6.9 million) increase among adults ages 18 to 49 for the same time period. People obtaining nongroup coverage can purchase health insurance either on or off marketplaces in each state, but financial assistance (premium tax credits and cost-sharing reduction subsidies) are available only for coverage on the marketplaces. In 2014, most older nongroup enrollees were enrolled off-Marketplace (and thus did not receive financial assistance). 2.2 million (38 percent of) older nongroup enrollees were enrolled on the Marketplace Plan Types Bronze Plans: lowest premiums, highest out-of-pocket costs Silver Plans: moderate premiums, moderate out-of-pocket costs Gold Plans: high premiums, low out-of-pocket costs Platinum Plans: highest premiums, lowest out-of-pocket costs AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 2 Enrollment of Adults Ages 50 to 64 in Nongroup Market by Type of Enrollee, 2014-2019 mg Marketplace § Off-Marketplace 3.6 M 3.7M 3.5 M 2014 2015 2016 Source: KNG Health Reform Model. Marketplace and 3.5 million (62 percent) were enrolled off-Marketplace. With rising health care costs, older adults enrolling in nongroup coverage increasingly enrolled in Marketplace plans between 2014 and 2018, though Marketplace enrollment dropped in 2019 (figure 2). In 2019, 3.6 million (66 percent of) older nongroup enrollees enrolled on the Marketplace and 1.8 million (34 percent) enrolled off-Marketplace. A similar enrollment trend was observed among younger adults ages 18 to 49. There is also substantial state variation in the share of older nongroup enrollees enrolling on- Marketplace versus off-Marketplace. The share of older nongroup enrollees obtaining coverage on the Marketplace ranges from a low of 18 percent in Arkansas to a high of 86 percent in Virginia. This variation is attributable to differences between states in market factors such as insurer participation and provider concentration, as well as state decisions regarding Medicaid expansion and allowing health plans that do not comply with ACA requirements.* 3.7M 3.8M 3.6M 2017 2018 2019 Since the ACA was implemented, silver plans have been the most popular plan type on the marketplaces. Silver plans have relatively moderate premiums and out-of-pocket costs, and federal cost- sharing reductions are only available to silver plan enrollees. In 2017, the federal government stopped payments to health insurers to cover the cost of cost-sharing reductions, and some states responded by allowing insurers to load these costs only onto marketplace silver plan premiums, which led to higher premium tax credits.> Since then, more older and younger Marketplace enrollees have shifted away from silver plans (figure 3). Uninsured Rate After enactment of the ACA, the uninsured rate fell significantly among both younger and older adults (figure 4). Between 2013 and 2019, the uninsured rate among older adults ages 50 to 64 fell an overall 34 percent, from 14.2 percent to 9.4 percent.° The most significant drop occurred between 2013 and 2016, when the uninsured rate among adults ages AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 3 Marketplace Metal Level Selections by Age Group, 2017-2019 m 2017 m 2019 33.1% 18-49 50-64 Bronze Source: KNG Health Reform Model. FIGURE 4 69.8% 18-49 Silver Uninsured Rate by Age Group, 2013-2019 70.0% 50-64 === 50-64 a= 18-49 25% d 22.7% | 20% | | 15% | 10% | : 8.6% 8.0% 8.5% 8.6% 5% | | 0% : 2013 2014 2015 2016 2017 2018 2019 Source: KNG Health Reform Model. 8.0% 6.8% 4.2% 4.6% 18-49 50-64 Gold 50 to 64 fell 44 percent, from 14.2 percent in 2013 to 8 percent in 2016. Coverage expansion since the ACA occurred primarily through nongroup market reforms, Medicaid expansion, and the extension of dependent coverage to adults up to age 26. Between 2013 and 2019, the overall increase in the share of older adults with nongroup coverage (2.6 percentage point increase) equaled over half of the decline in the uninsured rate among this group (4.8 percentage point decrease). For younger adults, the increases in nongroup participation were much smaller relative to the overall coverage gains (figure 5). This suggests that the ACA’s improvements to AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 5 Uninsured vs. Nongroup Coverage Rates by Age Group, 2013-2019 Ages 18-49 ——% Uninsured ———% Nongroup 24% 722.7% J 21% + | 18% - | 15% 4 13.6% 14.9% 12% 4 a 6.6% 6% 4 4.2% 5.2% 3% - | 0% 1 1 — 2013 Source: KNG Health Reform Model. Ages 50-64 =——% Uninsured === % Nongroup 24% - 21% + 18% +4 15% 114.2% 12% + 9% - 6% - 3% - 0% 6.2% 2013 Source: KNG Health Reform Model. 2019 nongroup health coverage were key drivers of coverage gains for older adults. Since 2016, nongroup enrollment among adults ages 50 to 64 has declined and the uninsured rate has risen, from 8 percent in 2016 to 9.4 percent in 2019. This reversal in coverage gains may be attributable to premium increases in the nongroup market and policy changes between 2017 and 2019. An important factor in 2017 premium increases was the expiration of the ACA’s federal transitional reinsurance program.’ 2018 and 2019 enrollment changes were likely attributable to market instability caused by public debate around repeal of the ACA and the individual mandate penalty, significant reductions in federal funding for Marketplace enrollment outreach and advertising, and other federal policy changes that discouraged enrollment in subsidized health coverage.* There is also a lot of state variation in the uninsured rate among adults ages 50 to 64, with a high of 18.7 percent in Texas and a low of 2.8 percent in Rhode Island and Massachusetts in 2019 (figure 6). In addition to differences in nongroup enrollment, this variation can be attributable to population differences and state decisions around expanding the Medicaid program under the ACA.? AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 FIGURE 6 State Variation in Uninsured Rate Among Adults Ages 50 to 64, 2019 Source: KNG Health Reform Model. AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 Appendix As of 2019, there were 60.9 million adults ages (or 66 percent) were enrolled on-Marketplace, 50 to 64 living in the United States, 9 percent while 1.8 million (or 34 percent) were enrolled (or 5.4 million) of whom were enrolled in the off-Marketplace. Table 1 shows these differences in nongroup market. Of these enrollees, 3.6 million nongroup enrollment and structure by state. TABLE 1 Nongroup Enrollment among Older Adults Ages 50 to 64, by Market and State, 2019 % of Total Adults Xo I Tey 50 to 64 Total 50 to 64 Enrolled i) 9 Population fa i) (of 50 to 64 (of 50 to 64 of Adults | Nongroup | Nongroup nongroup hongroup State 50 to 64 Market Ta cus Total # market) Melee market) Alabama | 926,670 74,348 8% 48,650 65% 25,697 35% Alaska 128,307 6,975 5% 4,749 68% 2,225 32% Arizona 1,222,562 84,104 7% 55,193 66% 28,911 34% Arkansas 607,827 120,171 20% 21,984 18% 98,187 82% California 7,070,527 869,021 12% 510,868 59% 358,153 41% Colorado 992,007 81,236 8% 41,931 52% 39,305 48% Connecticut 742,596 54,530 7% 41,215 76% 13,314 24% Delaware 184,806 9,979 5% 7,536 76% 2,444 24% District of Columbia 99,212 4,383 4% 2,741 63% 1,643 37% Florida 4,361,987 741,928 17% 533,228 72% | 208,700 28% Georgia 1,948,231 150,551 8% 121,593 81% 28,958 19% Hawaii 251,347 13,348 5% 7,582 57% 5,765 43% Idaho 319,754 40,815 13% 26,532 65% 14,282 35% Illinois 2,344,056 155,748 7% 99,781 64% 55,966 36% Indiana 1,233,284 61,615 5% 50,375 82% 11,240 18% lowa 587,622 43,826 7% 18,895 43% 24,931 57% Kansas 525,589 40,476 8% 27,253 67% 13,223 33% Kentucky 802,531 41,088 5% 25,545 62% 15,543 38% Louisiana 809,300 49,696 6% 30,786 62% 18,910 38% Maine 297,031 31,831 11% 24,600 77% 7,232 23% Maryland 1,169,402 77,541 7% 41,864 54% 35,677 46% Massachusetts 1,397,175 133,591 10% 90,482 68% 43,108 32% Michigan 1,972,803 142,269 7% 92,646 65% | 49,623 35% Minnesota 1,058,886 65,920 6% 41,033 62% 24,887 38% Mississippi 544,540 49,907 9% 23,624 47% 26,283 53% Missouri 1,179,088 95,394 8% 69,332 73% 26,062 27% Montana 200,553 21,204 11% 15,685 74% 5,519 26% Nebraska 353,382 37,885 11% 23,699 63% 14,186 37% AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 % of Total Pees Nee 50 to 64 Total 50 to 64 Enrolled i) vi Population if) ft (of 50 to 64. (of 50 to 64 of Adults | Nongroup | Nongroup nongroup nongroup 50 to 64 Market | Market Total # market) Total # market) Nevada 550,157 40,398 7% 26,796 66% 13,601 34% New Hampshire 302,237 23,770 8% 16,317 69% 7,453 31% New Jersey 1,798,109 134,424 7% 86,404 64% | 48,020 36% New Mexico 364,447 25,083 7% 17,713 71% 7,370 29% New York 3,616,290 153,196 4% 86,466 56% | 66,731 44% North Carolina 1,977,730 195,312 10% 146,923 75% 48,389 25% North Dakota 132,542 15,078 11% 5,768 38% | 9,309 62% Ohio 2,224,309 112,921 5% 71,675 63% 41,246 37% Oklahoma 675,314 57,876 9% 42,151 73% | 15,726 27% Oregon 745,827 74,655 10% 49,474 66% 25,182 34% Pennsylvania 2,975,468 204,841 8% 140,819 69% | 64,022 31% Rhode Island 220,210 18,851 9% 12,930 69% 5,921 31% South Carolina 987,254 97,527 10% 68,622 70% 28,905 30% South Dakota 168,160 19,048 11% 8,524 45% 10,524 55% Tennessee 1,264,379 94,637 7% 69,982 74% 24,654 26% Texas 4,788,994 409,214 9% 298,637 73% 110,577 27% Utah 455,675 53,395 12% 34,351 64% 19,043 36% Vermont 133,473 15,547 12% 9,626 62% 5,921 38% Virginia 1,582,016 109,864 7% 94,553 86% | 15,311 14% Washington 1,335,856 95,203 7% 64,844 68% 30,360 32% West Virginia 335,290 11,407 3% 9,529 84% 1,878 16% Wisconsin 1,185,499 103,766 9% 82,282 79% 21,484 21% Wyoming 106,162 10,239 10% 7,237 71% | 3,002 29% Source: KNG Health Reform Model The data in this paper rely on the KNG Health Reform Model population file. This file combines many data sources, including the American Community Survey, the National Health Interview Survey, and the Current Population Survey. KNG Health also calibrates the file to be consistent with administrative data from the Centers for Medicare & Medicaid Services. This file allows for many types of integrated estimates that would not be possible with any single data source. However, many of this report's findings are modeled estimates that may vary from other published resources. 1 Datain this report are from 2013-2019 and come from KNG Health Reform Model, a microsimulation model developed by KNG Health Consulting, LLC. State-level data for the indicators used in this report are included in the appendix of this paper. 2 The American Rescue Plan Act of 2021 temporarily expands ACA premium tax credits for 2021 and 2022. Data reported in this paper are from 2019; as such, they do not include these expanded subsidies. 3 The nongroup market for adults ages 18 to 49 consisted of 3.1 million people in the Marketplace and 5 million people off the Marketplace in 2014; by 2019, the proportions had reversed, with 4.7 million people in Marketplace plans and 2.3 million off the Marketplace in 2019. AARP PUBLIC POLICY INSTITUTE THE AFFORDABLE CARE ACT (ACA) AND OLDER ADULTS MARCH 2021 4 Foran explanation of factors and state decisions affecting differences amongst state marketplaces, see Holahan J., Wengle E., and Elmendorf C., “Marketplace Premiums and Insurer Participation: 2017-2020”, Brief, Urban Institute, January 15, 2020. Accessible at: https://www.urban.org/research/publication/marketplace-premiums-and-insurer-participation-2017-2020. 5 This practice is often referred to as “silver loading.” 6 Among all adults ages 18 to 64, the uninsured rate dropped 34 percent between 2013 and 2019. 7 Section 1341 of the ACA established a transitional reinsurance program to stabilize nongroup market premiums for 2014- 2016. Expiration of the program was one key factor in insurers increasing premiums for 2017. See Cox C., et al, “2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces”, Kaiser Family Foundation, Issue Brief, Nov 01, 2016. Accessible at: https://www.kff.org/health-reform/issue-brief/2017-premium-changes-and- insurerparticipation-in-the-affordable-care-acts-health-insurance-marketplaces/, 8 Other policy changes that may have affected 2018 and 2019 nongroup enrollment decreases include changes in policies and proposals relating to immigration, deportation, and enforcement of the public charge rule. See Finegold K. et al, “Trends in the U.S. Uninsured Population, 2010-2020”, Assistant Secretary for Planning and Evaluation, United States Department of Health and Human Services, Issue Brief, Feb 11, 2021. Accessible at: https://aspe.hhs.gov/system/files/pdf/26504 1/trends-in-the-us- uninsured.pdf, 9 Garfield, R., Orgera K., Damico A., “The Coverage Gap: Uninsured Poor Adults in States that Do Not Expand Medicaid”, Issue Brief, Kaiser Family Foundation, January 14, 2020. Accessible at: https://www.kff.org/medicaid/issue-brief/the-coverage- apuninsured-poor-adults-in-states-that-do-not-expand-medicaid/. Fact Sheet 658, March 2021 © AARP PUBLIC POLICY INSTITUTE 601 E Street, NW Washington DC 20049 Follow us on Twitter @AARPpolicy on facebook.com/AARPpolicy www.aarp.org/ppi For more reports from the Public Policy Institute, visit http://www.aarp.org/ppi/. https://doi.org/10.26419/ppi.00099.007 ~AARP Real Possibilities